Inman events are the best way to connect. Gain insights and build your network this October at the virtual Inman Connect where we’ll explore the Industry’s Playbook for the Fall Market. Then, join us in January for Inman Connect New York, in person or virtually. Reserve your tickets now, prices will go up!
Black and brown communities in the United States are effectively still redlined, according to to the head of the Department of Housing and Urban Development.
Lending practices are killing Black neighborhoods across the country by making it so that only investors can afford to buy in them, HUD Secretary Marcia Fudge said in a new interview with PBS Newshour.
“We’re still redlined communities in this country right now, because people won’t lend in communities where homes are valued at less than $100,000, $125,000, those communities begin to die,” she said. “We won’t loan money for people to buy those houses, we won’t give them money to rehabilitate those houses. So, what happens is investors come in, they buy them up for cash, most of the time, they start to rent, they do put a little money in them, and then they raise the rents for everybody in the neighborhood.”
Fudge also pointed to appraisal bias — a scourge the Biden Administration has attempted to deal with — as one of the chief drivers of inequality among Black and white neighborhoods.
“I think that we also have to understand that appraisal bias is a major issue in this as well,” Fudge said. “You will find that the blacker or browner the community is, the lower the valuation of the homes. And so that also creates a problem for lenders.”
Student loan debt — which the Biden Administration just wiped out $10,000 of for borrowers across the country — has also created uneven burdens for Black Americans, Fudge pointed out.
Fudge spoke broadly about the nation’s housing crisis and the steps the federal government is taking to ease it. She stressed that the federal government cannot solve the housing crisis itself, the same way Congress and local municipalities cannot ease the burden on their own.
“We need to do everything we can hands-on deck to be sure that everybody has an opportunity to live in a safe, decent house in a decent neighborhood,” Fudge told interviewer Geoff Bennett. “We’re doing everything from the federal government that we can, but we need help from Congress. We also need help from communities that are suffering with these problems.”
With homeownership becoming unattainable for many Americans, rents continuing to grow at breakneck speed with the federal government estimating that the nation is short 1.5 million units of housing, Fudge acknowledged that the best way forward to is to find ways to make it sustainable for developers to build more multifamily housing.
“What I do believe is that we need to find ways to incentivize or encourage developers to build more multifamily housing,” she said.
Fudge pointed to funds the federal government has already put in the coffers of local municipalities, but stressed that it was up to them to prioritize housing when drafting budgets.
“There is more money out there right now than they will ever have,” Fudge said. “The Rescue Plan, the COVID Plan, those bills created an environment where many states and cities are flush with resources. So, between treasury and us, we are saying to them, look, you have these resources, use them to try to alleviate this housing crisis that you have in your community.”
“So together, all of us working together, I do believe that we can make a dent in it,” she added.
